As confirmed by recent trading statements from some developers, it seems that the new homes market finally has cause for celebration with sales figures rising and the government's NewBuy scheme hailed a success. In this latest LSL Land & New Homes Index, revealed exclusively on whathouse.co.uk, James McAuley, director of LSL Land & New Homes, and Keith Osborne, editor of whathouse.co.uk, reflect on what this could mean for housebuilders and what, if anything, can be done to improve the market further.
"Of course there are regional variations and, as this month's Index illustrates, some areas continue to see greater average price increases than others; a reflection, possibly, of varying levels of demand across the UK
"As last month, it is East Anglia, the West Midlands and the South East that have seen increases across all property types, with prices for flats again seeing significant rises. The North West, in comparison, has seen widespread reductions with Yorkshire too also reporting almost across the board decreases," says McAuley.
Osborne, however, sees the figures reflecting a greater stability returning to the housing market, with few significant house price changes from last month across either regions or house types.
"The underlying theme is stability - nine of the 11 regions show more or less the same figures as last month across every house type. Even in the other two regions, just one house type showed any significant difference from the previous month, specifically, semi-detached homes in the North East (down 0.5% in the year to 30th September, but up 1.0% in the year to 31st October) and detached homes in Yorkshire and the Humber (from up 0.4% to down 0.1%)," says Osborne.
"So little change - and in some regions, this has been the case for several months - suggests that the market has settled down, with no dramatic price changes from month to month. In a traditionally busy period, one might perhaps expect to see more unpredictable figures month-on-month, so it suggests that supply and demand have met some sort of equilibrium.
"A number of major housebuilders have recognised the importance of supplying the right kind of homes to consumers to their recent financial success, for example, the switch from flats to houses. As this change in portfolio works through the system, it would not be unreasonable to start seeing some of the negative figures turn positive at some point. Providing the right mix of homes to the market should stop the decline in average prices of certain property types.
McAuley too cites the change in attitude and outlook of housebuilders, as well as the increase support from the government, as reasons for the more upbeat reports from the market.
"After a period of uncertainty it's clear that many developers are starting to feel more positive about the market and that many are more accepting of the support now on offer to them. Indeed, with 50 builders now registered with NewBuy, and more than 2,000 new homes reserved because of it, there's clearly a growing appreciation of its support. Ongoing success, however, will rely on more developers joining and, of course, on them being ‘ready' to build when demand comes.
On the back of this month's figures and as the year draws to a close, both McAuley and Osborne are cautiously optimistic for the future. "It will be interesting to see whether the anecdotal optimism expressed by many at the What House? Awards last month bears any statistical fruit," says Osborne, while McAuley adds: "How it will change in the months to come is unclear but on the back of NewBuy's success, and with Funding for Lending showing signs of having a positive impact on mortgage lending, let's hope that 2013 will see all regions benefit."